Master the Lateral Partner Questionnaire (LPQ)

Master the Lateral Partner Questionnaire (LPQ)

By popular opinion the LPQ or the lateral partner questionnaire is the most daunting step in the due diligence process for a partner moving to a new law firm. The larger the practice, the more thorough and involved the LPQ. But have no fear, this too shall pass. Honestly, law partners deal with more complex cases and transactions every month in their practice than this document. My advice is to find a quiet space, grab a strong caffeinated drink and knock this out in an afternoon.

Below is an overview of the lateral partner questionnaire, some advice, and focus on a couple points. An LPQ can have as many as 30-40 subjects for the partner to address. Yet once you have completed one, the others become much easier.
Editor’s Note: Are you a partner with a book of business or a law firm looking to hire lateral partners? Click here to receive our free 2016 Lateral Moves Guide.

Here is a quick list of subjects you will likely address in written or verbal form:
Personal Information

Education

Bar Admissions

Courts

Your current employer

Previous employer history

References and reason for leaving

Pro bono

Professional organizations

Ownership in for profit companies

Board or officer positions

Business relationships

Tax returns

Bankruptcy

Discipline and sanctions

Claims and litigation

Criminal history

Malpractice claims

Discrimination claims

Government investigations

Client financial situations

Marketing costs

No billed expenses

Restrictions to moving based on partnership agreement

Anticipated move date

Staffing needs for practice

Compensation history & expectation

Bill rate history

Hours billed history

Hours billed not originated history

Origination history and billing

Realization or collection history

Portability of clients

Future expectations

 

Be Honest

One function of this document is to ask red flag questions. Regarding difficult subjects like late taxes, bankruptcy, bar discipline, criminal history, malpractice, discrimination claims and investigations, hopefully you can answer no to all of these. If not, it is very important to begin your relationship with your future partnership with integrity and open discussion. Be forthright or they will find out. None of us does life perfectly.

 

Be Thorough

Every interaction with a prospective law firm tells them something about you: your professionalism, your interest level and your candidacy. Do not skip sections. Do not be vague. Do not play games. This only prolongs the process and creates mystery, which does not bode in your favor. An effective LPQ is a complete LPQ.

 

Be Accurate

One complaint that will forever be held in the Annals of Lateral Partner Movement History: The partner exaggerated on his numbers. Law partners, know your numbers and do not guess or exaggerate. This is the quickest way to sour your new partnership. Achieving accuracy on a book of business is not an easy feat. If there’s uncertainly, communicate, communicate, communicate. Do not turtle and hope for the best.

 

Be Humble

This is more attitude than information in a document. I have seen this over and over in partner transactions. If you approach the prospective firm as someone who is confident but not cocky, this process will be smoother and you will find favor. I have many clients who have me screen out a**holes to protect their culture. One area where this is evident is in their portable business estimates. Higher-minded partners may inflate or over estimate their book to achieve a higher salary. Bad Idea. My best advice to any partner: It is always better to under promise and over deliver. This will make you look like a rock star and will pay your dividends in many forms at your new law firm.

 

The Numbers

The most time consuming step in the LPQ is filling in the client billing history. Most LPQs I have seen require a minimum of 2 years prior history, and some as much as 5 years. Pulling this information from your firm’s accounting can be challenging. I have met partners who have 5 years of records on hand just in case because their firm limits access to the numbers. Keep in mind when you are talking to a prospective firm that they expect a 20-40% margin on what you bill and collect. Learning about their margin will give you some understanding of what you can expect for compensation depending, of course, on several factors such as allotted overhead per attorney, law firm compensation structure, firm politics and values, etc.

 

Other Tips

Save and send all your word processing documents in PDF format and forward them on to the prospect law firm. The last thing you want is the formatting to adjust when they open or print it, or the information getting lost somehow. PDF eliminates that risk. Communicate your expected completion date with a little cushion of time, and then complete it on time. If client matters delay the completion of it, communicate this.

 


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